Problem:
Ripken Iron Works faces the following probability distribution:
State of the Probability of State Stock's Expected Return if
Economy Occurring this State Occurs
Boom 0.25 25%
Normal 0.50 15
Recession 0.25 5
What is the coefficient of variation on the company's stock? (Assume that the standard deviation is calculated using the population statistic.)
A. 0.06
B. 0.47
C. 0.54
D. 0.67